The ECB decision was not surprising but nevertheless remained the sickest joke!

And this must be the queerest interpretation:

“[Mr. Draghi] doesn’t show any urgency that the ECB needs to deal with the prevailing disinflation trend, as low inflation is expected to be a long-term phenomenon in the zone,” said James Kwok, head of currency management at Amundi, which oversees nearly €750 billion ($1.02 trillion) of assets. Data released Friday showed the annual inflation rate slipping to 0.7% last month, matching October’s recent low, which had prompted the ECB to cut its main lending rate in November to 0.25%.

So it seems that, in fact, the ECB is “targeting very low” inflation. Why don´t they come out and say so? Would Germany have anything to do with that decision?

Read the whole article hereECB.

About the Author

Marcus Nunes
João Marcus Marinho Nunes is a partner of Phynance Estratégias Quantitativas e Investimentos and a professor of Economics at Fundação Getúlio Vargas in São Paulo, Brazil. He also blogs here: http://thefaintofheart.wordpress.com/

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